Reduce supply chain costs and gain a competitive edge
Operating within a Foreign-Trade Zone (FTZ) can provide crucial savings and operational advantages to give your company a competitive edge in the global marketplace. FTZs can help your company manage its cash flow by deferring, reducing and potentially eliminated Customs duties and reducing overall operating costs.
Customers moving cargo through The Northwest Seaport Alliance can take advantage of either FTZ No. 5 in King County or FTZ No. 86 in Pierce County. The South Harbor's FTZ No. 86 is the fourth-largest on the U.S West Coast for merchandise received, according to the FTZ Board's 2014 Report to Congress.
What is an FTZ?
Foreign-Trade Zones (FTZs) are designated, secure sites considered outside of U.S. Customs territory but physically located in the United States. Established in 1934, the Foreign-Trade Zone program was designed to encourage international trade and U.S. employment.
A company can apply to designate part or all of their own facility as an FTZ. Foreign and domestic merchandise may be admitted into the zone for storage, exhibition, assembly, manufacture, production and processing without formal Customs entry procedures, the payment of Customs duties or the payment of federal excise taxes. Applicable duties and fees are paid when the products leave the zone.
FTZ advantages
The advantages of using a FTZ include:
- Defer customs duties and federal excise taxes until merchandise is transferred from the FTZ to domestic market customs territory of the U.S. or a North American Free Trade Agreement (NAFTA) country (Canada or Mexico).
- Reduce processing/entry fees by as much as 85 percent with the Weekly Entry Process, which allows goods to be shipped 24 hours a day, seven days a week, with just one entry filed each week and just one Merchandise Processing Fee per entry.
- Reduce customs duties on goods processed or assembled in the FTZ when imported components have a higher duty rate than the finished goods.
- Defer Harbor Maintenance Tax payments and pay quarterly instead of at time of entry.
- Eliminate customs duties entirely when goods are re-exported from the FTZ.
- Store quota merchandise in the FTZ until the quota period opens and immediately ship goods into U.S. Customs territory.
- Exempt imported goods from state and local ad valorem taxes when they are held in the FTZ for storage, sale, exhibition, repackaging, assembly, distribution, sorting, grading, cleaning, mixing, display, manufacturing or processing. Goods manufactured in the U.S. and held in the FTZ are also exempt.
- Eliminate the need for drawback and keep funds in the operating capital of the company.
Activate a site
Learn more about designating and operating a site within our FTZs: